Whistleblowers Fight Back

By Elizabeth E. Hogue, Esq.

The US Department of Justice relies on whistleblowers for evidence to conduct enforcement actions. As providers certainly know, however, not all whistleblowers’ allegations are correct. Regardless of the outcome, providers often expend significant resources defending whistleblowers’ claims. The stigma of unfounded allegations may linger; damaging the reputations of providers.

Providers are now fighting back! In 2016, for example, individuals at Camden Clark Medical Center in West Virginia filled a whistleblower suit alleging false claims, kickbacks, and violation of the Stark law by a competing health system, Marietta Area Healthcare. The whistleblowers voluntarily dismissed the complaint prior to service on the competing health system.

Nonetheless, Marietta then sued the whistleblowers based on the common law, including claims for:

• Malicious prosecution that requires proof of malice

• Tortious interference that requires proof of improper purpose that goes beyond legitimate competition and efforts to succeed in business

• Abuse of process that requires evidence that a party willfully or maliciously misuses legal process to accomplish some purpose not intended by process

When Marietta moved for summary judgment, the Court focused on facts that show that the whistleblowers were not as interested in addressing fraud as they were in harming a competitor.

The goal of all providers should, of course, be to prevent whistleblower or qui tam lawsuits. In order to do so, providers must take seriously employees’ concerns regarding possible fraudulent and abusive practices.

Most whistleblowers take their concerns to their employers first. It is only when employers ignore their concerns or, even worse, retaliate against them for raising issues in the first place, that employees turn to outside enforcers for assistance in pursuing their concerns. Whether or not the allegations of employees are valid, providers must take them seriously. Thorough, well-documented investigations are required in order to demonstrate to employees that there is no problem or that the problem has been corrected.

Private citizens may initiate so-called “whistleblower” or qui tam lawsuits to enforce prohibitions against fraud and abuse in the Medicare, Medicaid, and Medicaid Waiver Programs and other state and federal health care programs, such as VA and Tri-Care.

One of the federal statutes that allows for whistleblower actions is the False Claims Act. This Act generally prohibits providers from “knowingly” presenting or causing to be presented false or fraudulent claims for payment by the government.

To bring a qui tam action under the False Claims Act, private parties must have direct and independent knowledge of fraud by providers against whom suits are filed. Thus, current or former employees who are familiar with providers’ practices may often initiate whistleblower actions under the False Claims Act. As you can imagine, employees who are ignored or retaliated against when they bring possible violations to their employers’ attention by being fired, for example, are likely to initiate whistleblower suits. An example follows.

In United States ex rel. Chorches v. American Medical Response [No. 15-3920 (2d Cir. July 27, 2017)], Paul Fabula worked as an emergency medical technician (EMT) for American Medical Response. Fabula realized that his employer fraudulently sought reimbursement from the Medicare Program by falsely claiming that ambulance services were medically necessary when they were not. Specifically, EMTs were asked to falsify electronic Patient Care Reports (PCRs) to make it appear that services were medically necessary. Supervisors printed copies of PCRs, revised them, and directed staff members to signed the revised forms.

In one instance, Fabula provided services with another staff member who prepared the PCR. A supervisor directed the staff member to fraudulently revise the form. When the staff member refused, the supervisor directed Fabula to sign the revised form. When Fabula refused, he was fired.

And what did Fabula do? He filed a continues on page 36